Bitcoin has awakened again. The flagship crypto is continuing with its price discovery phase to set new price records, breaking past $35,000 for the first time on January 5. After setting its last record of about $34,800 on January 3, bitcoin set a fast retracement down to $28,000 the following day.
Nonetheless, that crash was short-lived with bitcoin rapidly recovering and pressing into new all-time highs above $35,845 around 4.30 am (UTC). For now, bitcoin has gained over 70% since it broke into new highs on December 16, and it is up 20% in seven days.
The new record was posted a day after the US Office of the Comptroller of the Currency published guidance allowing federally chartered banks to use various stablecoins and public blockchain networks for payment settlements.
Ethereum has followed bitcoin’s lead, and it is back above $1,100, gaining 44% in the past week.
The upward rally is important since the prices surged from the $30,000 level to reach new highs in just 24 hours. That is a daily gain of over 16.6%. The flagship crypto is now testing the key level with strong signs of a major bull run.
Bitcoin is now wild, and since it smashed the $20,000 level in December, the prices exploded at a massive rate: from that level to the fresh highs in about 20 days. That is a gain of 75% in value.
Institutions Have Come In
The retail and institutional demand for the virtual currency spiked and the crypto exchanges are also setting records in volume. Although there are multiple reasons behind this rally, one of the main reasons is the surging institutional investment in the crypto. Nasdaq-listed MicroStrategy kicked-off this trend with its $250 million investment and later increased it to above a billion dollars. Other firms, including MassMutual, an American mutual fund, followed suit and acquired $100 million worth of Bitcoin.
Hedge funds have also come in, and Anthony Scaramucci’s SkyBridge Capital unveiled a new Bitcoin fund. The general crypto market sentiment also strengthened as JP Morgan Chase, a previous bitcoin critic, recently projected a long-term BTC price of $146,000.
Fear Is Increasing
Despite this positive sentiment, many investors and traders are becoming more doubtful about the extreme bull run. The crypto derivatives traders are cutting many of their leverage positions, and as CryptoQuant CEO Ki-Young Ju said:
“$BTC derivative traders are uncertain about the next move, and scared.”
SkyBridge’s Scaramucci said that a possible bitcoin bubble is forming as the rising prices are forming a FOMO sentiment in the markets. That may result in extreme profit booking. Scaramucci recently told CNBC:
“This could be a blow-up top bubble. We expect the fund to be volatile, and it could lose money.”
Notably, SkyBridge’s pitch to its BTC fund investors called the flagship crypto “better at being gold than gold.”